Estonia gives 125 million EUR for fossil fuel production despite the need to tackle both coronavirus and climate crises

Energy transition| Financing the transition

The Estonian Government decided[1] to allocate 125 million EUR in aid to the state-owned company Eesti Energia for the construction of a shale oil plant. This decision is irresponsible in light of the ongoing pandemic, Estonia’s future and EU’s climate goals.

Climate expert at the Estonian Fund for Nature, Piret Väinsalu, said:  “Much better uses could be found for this money in the current crisis – either in the healthcare sector or to support long-term economic solutions. At the moment, providing a sense of security to oil shale workers with a new oil plant is like trying to build a new hotel for those who are unemployed in the hotel industry.”

Director of Climate Action Network (CAN) Europe, Wendel Trio,  added: “The EU should tackle both the health and climate crisis by taking the right measures and using its money wisely. In this regard, the decision of the Estonian government is unacceptable and irrelevant to what the rest of the EU is trying to achieve.”

The government’s decision is based on the outdated Estonian National Strategy Papers [2], which have to be reworked in the light of the 2050 climate neutrality objective of the European Union. As Estonia is prolonging its dependence on fossil fuels, environmental damage and carbon emissions will continue. According to the SEI Tallinn study[3], it will make it extremely unlikely for Estonia to achieve climate neutrality by 2050.

Estonia is facing a recession because of the impact of the coronavirus outbreak, and declining tax revenues will further limit public sector’s capacity. It is crucial for people’s wellbeing that the Estonian government makes wise, forward-looking choices.

Alongside environmental organisations, the government’s decision has also been criticised by Estonian research organisations[4], youth associations[5], entrepreneurs[6]  and politicians[7].


Cristina Dascalu – Communications Coordinator, Climate Action Network (CAN) Europe,

Piret Väinsalu, Climate Expert, Estonian Fund for Nature,, phone + 372 581 20287

Mariliis Haljasorg, Communications Expert, Estonian Fund for Nature,, phone +372 5623 1633

Climate Action Network (CAN) Europe is Europe’s leading NGO coalition fighting dangerous climate change. With over 160 member organisations from 35 European countries, representing over 1.700 NGOs and more than 47 million citizens, CAN Europe promotes sustainable climate, energy and development policies throughout Europe.

Notes for Editors:

[1] Government green lights new €286 million oil shale plant (Estonian Public Broadcasting ERR, March 27, 2020)

[2] The National Development Plan of the Energy Sector until 2030 and General Principles of Climate Policy until 2050 were formally adopted in 2017, but their content was drawn up several years earlier and does not take into account recent developments. The basic research for ENMAK was carried out in 2013-2014, thus even before the Paris Agreement. General Principles of Climate Policy set the goal of -80% greenhouse gas reductions, which needs updating to comply with climate-neutrality goal. Also, the environmental impact of the plans was not assessed when formulating the General Principles of Climate Policy (it was decided not to perform a SEA), nor were concrete measures planned to achieve the objectives set.

[3] The Stockholm Environment Institute in Tallinn provides an analysis of sector-specific issues that Estonia must address, and offers an outline of the cost effectiveness of related measures. Among other key findings, the analysis highlights that “Estonia must decarbonize its energy supply, and shift away from its reliance on oil shale. To ensure a just transition, new investments are needed to support and scale wind, solar and local bioresources. /…./ Investing in mature and scalable technologies today is an important first step. Such investments create the conditions to quickly adopt emerging technologies after 2030. These investments also put Estonia on the path to achieve the agreed target of a 70% emissions reduction by 2030, and to reach climate neutrality by 2050. Early action “future proofs” Estonia’s economy – by avoiding the likelihood of stranding public assets, and by enabling local industries to take steps needed to embrace new economic opportunities.”

[4] Statement of the Estonian Young Academy of Sciences and the Estonian Chamber of Research “Teadusühendused: põlevkivitehase rajamine kriisiolukorras on vastutustundetu ja kahjulik” (national daily Postimees, March 27, 2020. In Estonian)

[5] Youth organizations: Government should not invest in oil plant (Estonian Public Broadcasting ERR, March 29, 2020)

[6] Ettevõtja Eesti Energia õlitehase rahastusest: kõike küll ei räägita, aga võib olla on tegu ettevõtte varjatud päästmisega? (Estonia’s biggest news portal Delfi, March 29, 2020)

[7] Uue õlitehase toetamine on vastutustundetu, leiavad rohelised ja opositsioon (Estonian news portal Geenius, March 27, 2020. In Estonian) and Õlitehase kriitikud ei mõista valitsuse rahaeraldist (national daily business paper Äripäev, March 30, 2020) are the two examples where environmentalists and opposition politicians state that the Estonian government’s decision to invest 125 million euros in building a new oil plant is irresponsible and risky both economically as well as environmentally. For example, the Estonian Reform Party’s Andres Sutt, a member of the Riigikogu Finance Committee and former board member at Eesti Energia, said the government’s decision is irresponsible and does not solve any urgent problem in the Estonian economy.

More background information:

Estonia’s energy sector has been based on the burning of fossil fuels for decades – in 2017, nearly 70% of Estonia’s CO2 emissions came from the energy sector. Estonia is one of one Europe’s largest CO2 emitters per capita. During 2019 oil shale electricity production declined as a result of rising CO2prices in the EU and the promotion of green energy. At the same time, up to four new shale oil plants and pre-refinery are under discussion.


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